Cuadrilla Resources Gets Poland Shale Exploration License

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11/21/2012 | 04:04pm CET

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By Ben Winkley

LONDON--Cuadrilla Resources said Wednesday it has won a contract to explore for shale gas in a pocket of east-central Poland, the country at the center of European efforts to rival the success of the U.S. shale boom.

The closely-held explorer, which in 2011 found itself in the spotlight when environmental concerns forced it to suspend its U.K. operations, said it will undertake seismic work in the first quarter of 2013.

The Pionki Exploration License covers some 827 square kilometers of east-central Poland. In a statement, Cuadrilla said the shale appears similar in age and potential to that at its U.K. license.

Poland wants to exploit its shale gas reserves to reduce its reliance on natural gas imported from Russia, and to build gas-fired power plants to diversify away from coal as the primary source of its electricity. In the U.S., shale gas accounts for 10% of the overall U.S. supply and is expected to save the U.S. from spending $100 billion a year on imported liquefied natural gas.

The Polish government has encouraged state-controlled firms, led by gas firm PGNiG SA (PGN.WA), to do exploration drilling, mostly in Poland's north and east, after Exxon Mobil Corp. (>> Exxon Mobil Corporation) pulled the plug on its efforts there in June.

Progress has been frustratingly slow, however, with shale gas-focused companies learning to navigate a bureaucracy that hasn't shaken off the cumbersome legacy of its communist past.

But Wednesday, the Polish government confirmed its commitment to the search for shale, saying it will continue to drill despite objections raised by some members of the European Parliament and calls for a European Union-wide moratorium on the rock fracturing technology used in production. Some would like to see the hydraulic fracturing technology, known as fracking, banned on environmental grounds.

-Marcin Sobczyk and Marynia Kruk in Warsaw contributed to this item.

Write to Ben Winkley at ben.winkley@dowjones.com

Corrections & Amplifications

This item was corrected at 11:21 a.m. EST because it misstated the year as 2012 in which Cuadrilla suspended its U.K. operations in the second paragraph. Drilling was suspended in 2011.